Wednesday, February 20, 2008

MET: Siege of Gaza bites into Israeli economy

Gaza's shattered economy is not the only casualty of Israel's embargo and siege on the Palestinian territory, now under the control of Hamas. The sanctions are coming back to bite Israel too, with tens of thousands of Israeli jobs on the line as businesses face losses or closure after losing their major market.

The West Bank and Gaza Strip constitute Israel's second biggest market after the United States. In 2006, the combined 3.5 million residents of the Palestinian territories imported over $2 billion worth of Israeli products, or more than 6 percent of all Israeli exports excluding diamonds. This is the same amount that Italy and France combined, two of the eight richest countries in the world, imported from Israel.

Israel's business community has voiced its alarm. Ronen Leshem, head of the business department at Israel's Peres Center for Peace, wrote recently in an op-ed in The Marker, an Israeli business publication: "In a few weeks, the business sector in Gaza is going to collapse, and one of the big losers is going to be Israel."